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I have been following it for a while and Obama signed it yesterday. With crowdfunding you deal with income and taxes because sometimes it is a prepayment for a dvd, etc. So it is an exchange of goods. People may consider it a donation, but not really. It really is income. People have screwed around trying to hookup with non-profits to give the people a write-off with mixed results.

With the bits that I have read about the JOBS bill, you now have investors. So maybe you will get more people interested because they now own part of the deal. But now you have a ton more documentation involved to explain what the investors are getting, business plan, the waterfall tables, operating agreements, etc. Depending on how the deal is structured, you may end up with K1s to provide to every investor, every year. And when I last checked Sec 181 was not renewed so you no longer have that benefit to offer investors.

Look, I think both are great approaches because they provide the artist with access to funds. Especially, if you have nothing to lose. For some people, the complications may not be worth the effort and you don't want the IRS up your butt about this stuff. It is a bit of the wild wild west and I am not sure if the IRS has figured out the handling of crowdsourcing for tax purposes.

Like I said, for those who have nothing to lose or willing to go through the process both options are great. I think the JOBS approach will give someone an experience closer to have bigger money is raised. Because of the documentation that will be needed. And everyone has to start somewhere to gain experience.

I plan on listing my crowdfunding as income (Amazon is going to file it with the IRS when I am paid, that's how kickstarter works), but it's all going back out the door as expenses, so should be a wash (I hope).

With "investing" it's going to get MUCH more complicated I imagine, but potentially worth it in some situations.

I have been following it for a while and Obama signed it yesterday. With crowdfunding you deal with income and taxes because sometimes it is a prepayment for a dvd, etc. So it is an exchange of goods. People may consider it a donation, but not really. It really is income. People have screwed around trying to hookup with non-profits to give the people a write-off with mixed results.

With the bits that I have read about the JOBS bill, you now have investors. So maybe you will get more people interested because they now own part of the deal. But now you have a ton more documentation involved to explain what the investors are getting, business plan, the waterfall tables, operating agreements, etc. Depending on how the deal is structured, you may end up with K1s to provide to every investor, every year. And when I last checked Sec 181 was not renewed so you no longer have that benefit to offer investors.

Look, I think both are great approaches because they provide the artist with access to funds. Especially, if you have nothing to lose. For some people, the complications may not be worth the effort and you don't want the IRS up your butt about this stuff. It is a bit of the wild wild west and I am not sure if the IRS has figured out the handling of crowdsourcing for tax purposes.

Like I said, for those who have nothing to lose or willing to go through the process both options are great. I think the JOBS approach will give someone an experience closer to have bigger money is raised. Because of the documentation that will be needed. And everyone has to start somewhere to gain experience.

I think it will be interesting to watch.

If you use an intermediary (Early Shares, CrowdFunder, FlipVenture), they're responsible for almost all documentation provided to the SEC. And a business plan is not legally required... according to the law as is anyway. As far as I understand, there are no contracts between investors either. The intermedaries are essentially stock markets (and you don't get a contract with each specific company when buy stock on the market, do you?). The SEC still has 269 days to finalize the rules and regulations, so a business plan may be required, when it's all said and done.

And by the way, the details on that link are wrong. The senate modified the bill to cap the maximum amount that can be raised to $1 million per year.

Below $100,000 you can get by without audited financials.
Between $100,000 and $500,000 your financials need to be verified (but not audited) by a third party CPA.
Over $500,000 they have to be audited.

If your annual income is less than $100,000 you're limited to investing the greater of $2000, or 5% of your annual income.
Over $100,000 you're limited to 10% (but the maximum aggregated amount is $100,000).